All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

Posts: 1
Registered: ‎11-08-2017
Accepted Solution

Child tax and earned income tax credit

My and I are self employed. We don't earn enough to owe federal taxes. But we are eligible for child tax and earned income tax credits. I know we cannot get a refund if we pay no taxes in. How much must we pay in to receive a refund for those credits?
Trusted Council Member
Posts: 6,191
Registered: ‎02-23-2016

Re: Child tax and earned income tax credit

Hi Mrsyazz90,



Welcome to the H&R Block community.


Your earned income from self-employment is your net amount after deducting expenses on Schedule C or your non-passive amount that's reported to you on Schedule K-1 for other types of businesses.


For the child tax credit you must have more than $3,000 worth of earned income to claim the credit.  If your earned income is more than $3,000 but less than $4,000 then you will get a partial child tax credit instead of the full $1,000.  If you are eligible for more credit than you have tax liability then whatever amount of credit is left over after your tax is reduced to zero becomes refundable and adds to your tax refund.


For the earned income credit you have to have earned income but there is no floor limit, so you can have $50 worth of earned income and still get an earned income credit.  If you have kids the earned income credit increases as your earned income increases until you hit around $23,000 worth of earned income and then after that it decreases as your income increases until you reach the phase-out threshold for the number of qualifying children you have.  The EIC is a refundable credit, which means you'll get it whether you have tax liability or not.


The amount of tax you pay through withholdings or estimated payments has nothing to do with qualifying for the credits.  It's the amount of earned income that you received during the year that you want to look at.



If you have any other questions I'll be glad to help.



Senior Tax Advisor (Tampa, FL)